North West business confidence continues upward trajectory

Business confidence continues to rise throughout the North West, the latest Business Barometer from Lloyds Bank Commercial Banking revealed today (February 29).

Following an eight point increase last month, business confidence ticked up by a further nine points, to 49% in February.

Companies in the region reported higher confidence in their own business prospects month-on-month, up seven points to 54%. When taken alongside their optimism in the economy, up 10 points to 43%, this gives a headline confidence reading of 49%.

North West businesses identified their top target areas for growth in the next six months as evolving their offering, for example by introducing new products or services (43%), introducing new technology, such as AI (39%), and investing in their team (38%).

A net balance of 40% of businesses in the region also expected to increase staff levels over the next year, up four points on last month.

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

Nationally, overall, UK business confidence dipped two points in February to 42%, driven by softening confidence from firms in both their own trading prospects (49% vs. 51% in January) and the wider economy (34% vs. 37% in January).

However, companies’ hiring intentions increased to the highest level since May 2022, with 36% of firms intending to increase staff levels over the next 12 months, up three points on the month before.

Scotland was the most confident part of the UK in February (56% vs. 42% in January), followed by the North East (54% vs. 62%) and the East Midlands (52% vs. 38%).

There was a mixed picture for sectors this month. Confidence fell in manufacturing (nine points to 40%) and construction (seven points to 38%), respectively, although results remain higher than the same time last year.

In contrast, the dominant services sector was unchanged compared with January at 45%, exceeding all months of 2023 except for November. Retail confidence was broadly steady, dipping one point to 41%.

Dave Atkinson, area director for the North West at Lloyds Commercial Banking, said: “Businesses are telling us that innovation is the name of the game, with many firms setting out plans to introduce new products and services to the market – a reflection of the inherent creativity of the region’s business community in finding opportunity wherever it lies.”